Costa Coffee's Expansion in India Defies Global Economic Slowdown

Despite the uncertain global macro environment prompting many businesses to rethink their growth strategies, British coffee chain Costa Coffee is accelerating its expansion in India. The country, traditionally a tea-drinking nation, is witnessing a significant shift towards coffee, especially among millennials and Gen Z with higher disposable incomes.

India: A Top Market with Potential to Rise

Philippe Schaillee, CEO of Costa Coffee, highlights India's position among the company's top 10 global markets, with the potential to break into the top five within five years. The coffee space in India is growing at an impressive rate of 10%-12%, double that of global markets, driven by a shift towards premium, specialty coffee perceived as a source of healthy energy.

Competitive Landscape and Strategic Growth

Costa Coffee, operating in India through its franchisee partner Devyani International, faces competition from global giants like Starbucks and Tim Hortons, as well as new-age players such as Blue Tokai Coffee Roasters and Third Wave Coffee. Despite challenges like steep increases in coffee prices, the company remains committed to opening 40-50 new outlets annually in India, focusing on diversifying its offerings and selling more combo packages to attract consumers.

The Future of Coffee in India

With more millennials and Gen Z embracing coffee culture, Costa Coffee is poised for continued growth in India. The company's strategy to not lower price points but to enhance the quality and variety of its offerings underscores its commitment to capturing the evolving tastes of Indian consumers.